MTO- Make to Order (pull model): slow moving products, hard to fast, costly to keep in the inventory
BTO - Build to Order (pull model)
ATO - Assemble to Order (pull model): Motorcycle, Bike, customized garment, computers
ETO - Engineer to Order (pull model): construction, engineering firm,
Below the some more specifics about MTO model:
MTO - manufacturing process , manufacturing starts only after a customer order is received
It's a pull type of operation.
Production is triggered from a Sales Order, or a Customer Order
Make to order production is largely a production planning configuration. It is also controlled by the requirements type, which is determined by three things the strategy group (MRP 3) in MMR the MRP group (MRP1) in MMR the item category and MRP type (MRP 1)
The requirements type is determined on the basis of the MRP group (MRP1) and the strategy group (MRP3) in the material master record. In addition, a plant must be assigned for make-to-order items in the sales order.
The strategy group groups all the planning strategies that can be used for a particular material. The planning strategy represents the procedure used for planning a material and is (technically speaking) controlled by the MRP types. Dependencies You define planning strategies and strategy groups in Customizing for demand management.
Process in ECC (Process flow of Strategy 20:)
1. Creation of sale order – VA01
2. MRP run – MD01/MD02
3. Planned order conversion to production order – MD04
4. Production Execution – CO02, MB1A, CO15, MB31
5. Sale order stock in plant- MD04
6. Delivery of the stock to customer against the sale order – VL01N
MRP Strategies
Make - To - Stock
10 - Make to stock production: http://scn.sap.com/docs/DOC-50032
- For Finished product (Material master – MRP3 tab)
- Only the planned independent requirement important when run the MRP
- Sales order only info, not relevant for MRP, but you can display them
- determined without reference to sales orders
- FIFO principle (oldest PIR reduced first)
11 - Make-to-stock prod./gross reqmts plnning: http://scn.sap.com/docs/DOC-53077
30 - Production by lot size:
- For Finished product (Material Master – MRP3 tab)
- FIFO principle (oldest PIR reduced first)
- Sales order is MRP relevant
- Planned independent requirements are not consumed by sales orders
40 - Planning with final assembly:
- For Finished Product (Material Master – MRP3 tab)
- Sales order is MRP relevant
- Planned independent requirements are consumed by sales orders
- If the customer requirements exceed the PIR, automatically creates planned order (including unplanned quantities) for sales order.
Example: Material Master settings in MRP3 tab:
- Strategy group: 40
- Consumption mode: 2 (Backward/Forward comsumption)
- Bwd consumption period: 30 day
- Fwd consumption period: 20 day
With this settings the Sales Order will be consume the required quantities from the Backward PIR (to 30 days from SO date), and afterward from the Forward PIR (to 20 days from SO date), still the Sales Order not will be ok.
- MD73 shows you the Planned Independent Requirements
- Sales Order not will be visible in MD04
- SE16:
- PBIM: search Material, and copy the Requirement Pointer
- PBED: insert Requirement Pointer, the quantitites will be visible
- PBHI:
- MD74: if you delete the Sales Order, the Planned Independent Requirement will be visible again in MD04 (Stock List)
70 - Planning at Assembly Level:
- For Semi-finished product (Material Master – MRP3 tab)
- The finished product can show any strategy!
- The requirements consumed by sales orders in the second level of BOM
- Using this strategy for example: in car manufacturing
Make - To - Order
20 - Make to order production: http://scn.sap.com/docs/DOC-54915
- Without PIR
- Production only if there is sales order
- Using this strategy for example: special yacht or spaceship manufacturing etc.
- Material Master MRP4 tab you can set Ind/Coll. (only to subassembly), and then you can see the Orders what you are set in here:
- 0 – inheritance from header
- 1 – Individual: stated individually
- 2 – Collective: grouped together
- MRP elements are created with reference to sales orders
- MD50: MRP run for the grouped segment
50 - Planning without final assembly:
- Assemblies and components are kept in stock until the SO is received
- Indepenedent planning from SO with planned independent requirements (PIRs)
- High value added at final assembly level
- Reduce delivery times
- Individual/ collective indicator except for the final assembly it is set to 2
Existing Planning Strategies in SAP
| Strategy | RTyp for Demand Management | RTyp for Customer Order/requirement | Name |
| 0 | No planning / no requirements transfer | ||
| 1 | 41 | Make to Order | |
| 10 | LSF | KSL | Make-to-stock production |
| 11 | BSF | KSL | Make-to-stock prod./gross reqmts plnning |
| 20 | KE | Make-to-order production | |
| 21 | KP | Make-to-order prod./ project settlement | |
| 25 | KEK | Make-to-order for configurable material | |
| 26 | KEL | Make-to-order for stock item | |
| 30 | LSF | KL | Production by lot size |
| 40 | VSF | KSV | Planning with final assembly |
| 50 | VSE | KEV | Planning without final assembly |
| 51 | VSE | KPV | Plng w/o final assembly / project settl. |
| 52 | VSE | KSVS | Plnng w/o final assem. w/o make-to.stock |
| 54 | VSE | KEKT | Planning variants |
| 55 | VSE | KELV | Planning stock item w/o final assembly |
| 56 | VSE | KEKS | Characteristics planning |
| 59 | VSEB | Planning at phantom assembly level | |
| 60 | VSEV | KEVV | Planning with planning material |
| 61 | VSEV | KPVV | Plng with plng material / project settl. |
| 63 | VSEV | KSVV | Planning w.plng material w/o mke-to-ord. |
| 65 | VSEV | ELVV | Planning stock item with plnng material |
| 70 | VSFB | Planning at assembly level | |
| 74 | VSEM | Plng at assembly lvl w/o final assembly | |
| 80 | KPX | Project settlement for non-stock items | |
| 81 | KMSE | Assembly processing with repetitive mfg | |
| 82 | KMFA | Assembly processing w. production orders | |
| 83 | KMNP | Assembly processing with networks | |
| 84 | SERA | Service orders | |
| 85 | KMPN | Assembly processing with network/project | |
| 86 | KMPA | Configuration with process orders | |
| 89 | VSE | KMSE | Assembly proc. w. characteristics plng |
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